Down v Murray[2017] QDC 313

DISTRICT COURT OF QUEENSLAND

1. [1]
   This is an application started by originating application for orders that the respondent pay the applicant $2,868.80 as repayment of a loan repayable on demand and declarations that the respondent pay $80,000 to the applicant by way of a third party contract between Gwenda Knapp and Jennifer Murray to the benefit of the applicant pursuant to s 55 of the Property Law Act 1974.

Facts

2. [2]
   Robin Adair Harrison was the father of both the applicant and the respondent. He died on 11 January 2016, leaving a will appointing Gwenda Eva Knapp as the executrix and leaving $20,000 to Ms Knapp, $30,000 to his grandson and the residue to the respondent. No provision was made for the applicant. The only real asset of the defendant’s estate was his former home which was sold on 4 June 2017 with settlement on 21 July 2017. The proceeds of sale were $317,226.96. These proceeds have been distributed with the exception of $12,073.15.

3. [3]
   The applicant cleaned, tidied and prepared for sale the deceased’s former home. She has rendered an account for those services and funds are being held pending resolution of this matter.

Discussion

4. [4]
   To support an argument that there was a contract between Ms Knapp and Ms Murray, the applicant has exhibited two documents dated 26 June 2017, one which is under the hand of Gwenda Knapp to Gayler Law indicating that the estate should be distributed and including a payment of $80,000 to the applicant, and the other under the hand of Jennifer Lynn Murray and co-signed by Ms Knapp indicating that she wished $80,000 to go to the applicant. These documents of course are not a contract between the applicant and the respondent. The applicant submits that they show the existence of a contract between the executrix and the respondent for the benefit of a third party, namely the applicant. The applicant argues that the consideration for the contract is Ms Knapp being released in part from her need to perform the terms of the will of Robin Adair Harrison strictly in accordance with its terms, in connection with the payment of pecuniary legacies and instead distributing those funds in accordance with the direction given by Jennifer Lynn Murray on or about 23 June 2017. I cannot see that this amounts to valuable consideration. In any event it is clear from the letter of the applicant of 26 June 2017^[1] that there was a dispute about the money from the day those documents were signed.

5. [5]
   The respondent has filed an affidavit, supported by an affidavit from Ms Knapp, swearing that the documents were signed under duress and this situation is supported in part by the letter from the executrix solicitors of 13 July 2017^[2]  where the solicitors suggest that a caveat has been used as an act of extortion. Clearly the debt is disputed and this is not an appropriate matter for summary judgement.

6. [6]
   Whether properly pleaded, this matter could give rise to an action under s 55 of the Property Law Act 1974 remains to be seen, however, on the material currently before me such a claim would not succeed.

7. [7]
   In any event, a more fundamental problem arises in this case. The matter was commenced by originating application. The originating application seeks two orders, one in relation to a debt of $2,868.80 and the other an action under s 55 of the Property Law Act 1974 seeking payment of $80,000.

8. [8]
   In relation to the debt of $2,868.80, this is a simple action of payment of a liquidated sum payable on demand. The amount is in dispute and is small and would in my view only complicate and cloud the issues involved in the substantive matter. It should be resolved as a small claim. It should not be in this court.

9. [9]
   Further the matter was not properly started by originating application. The applicant, in bringing the action in this way relied on r 11(a) of the Uniform Civil Procedure Rules 1999, which states:

“A proceeding may be started by application if:

1. (a)
   the only or main issue in the proceeding is an issue of law and a substantial dispute of fact is unlikely.”

10. [10]
    The affidavits of the respondents show that a dispute in relation to the $80,000 was always likely because the claim is that any signed documents were obtained by duress. In a letter dated 13 July 2017, the applicant was put on notice that the agreement was very much in dispute. The letter states in part:

“In relation to the correspondence of 26 June 2016 directed to the executor, we note that there is a formal notice pursuant to s 444(4) of the Succession Act 1981 (Qld) that your client is challenging the estate and that is something she is entitled to do. It would seem that if there was any arrangement to pay your client money in conflict with the terms of the will (which payment is not admitted and denied) then your client’s challenge to the estate is in fact at law, in our view, a counter offer. We submit then the challenge to the estate disqualifies any potential or arranged prior agreement.”

11. [11]
    If it were not obvious before then it is clear at that stage that the respondent was withdrawing any agreement to pay money if in fact there was an agreement in the first place and any acceptance as is alleged by the applicant on 20 October 2017 takes place long after the dispute is raised. From that time it was clear that there was a dispute on the facts and the proper way to start any action would be by way of claim not by application.

12. [12]
    Supplementary submissions have been received by the parties in relation to this issue. The applicant has pointed out that the letter dated 13 July 2017 was from solicitors acting for the estate and not the respondent. The applicant is correct in that submission. Nonetheless it did give the applicant notice that the debt was in dispute and if the contract itself between the executrix and the respondent was denied then the applicant’s case in s 55 of the Property Law Act 1974 is in jeopardy. In any event it is clear from the material that the applicant knew from an early stage that there was a dispute. This is evident from the letter to Ms Knapp dated 26 June 2017 and the emails referred to in paragraphs 56 and 58 of the applicant’s affidavit.

13. [13]
    During argument, the applicant asked that the application should be ordered pursuant to r 14 of the UCPR to be continued as if started by claim. The respondent opposes that application on the basis that it allows circumvention of the usual and proper way to proceed. In my view in this case it is important for the applicant to outline clearly the circumstances in which it is contended that the claim is founded. It is not clear from the application as it currently stands. In my view it is appropriate that a claim and statement of claim be filed in this matter in order to provide some clarity in relation to this action. Accordingly, it is appropriate in my view, given that the matter is still well within time for the application to be struck out. This does not prevent, of course, the applicant from starting proceedings by way of claim and statement of claim as it should have done in the first place.

Order

1. The application is dismissed.

2. The applicant is ordered to pay the respondent costs as assessed unless otherwise agreed.